Dialog gets arbitration notice seeking up to RM560m

by **Cals** Fri 11 Apr 2014, 14:33

Business & Markets 2014

Written by Supriya Surendran of theedgemalaysia.com

Friday, 11 April 2014 10:07

KUALA LUMPUR: Dialog Group Bhd’s wholly-owned unit Dialog E & C Sdn Bhd (DECSB) has received an arbitration notice from Tanjung Langsat Port Sdn Bhd, seeking as much as RM560 million in losses and damages, with costs. The arbitration is referred to the Kuala Lumpur Regional Centre for Arbitration.

In a filing with Bursa Malaysia yesterday, Dialog Group said the notice dated April 7 was for arbitral proceedings pursuant to the provisions of the engineering, procurement, construction and commissioning (EPCC) contract dated Oct 18, 2006 and a settlement agreement dated May 13, 2011.

“The matter has been referred to DECSB’s solicitors and the company intends to pursue all available legal avenues to challenge the claims” said Dialog Group. “We are of the opinion that the arbitration proceedings are not expected to have a material impact on the operational and financial position of Dialog Group for the financial year ending June 30, 2014.”

Tanjung Langsat Port had awarded a RM89.5 million EPCC contract to DECSB to build a 100,000 cu m oil terminal facility at the port in Johor.

Tanjung Langsat Port, which commenced operations at the facility, alleged that it had suffered losses and damages caused by a fire on part of the facility which occurred on Aug 17, 2008, after the facility was handed over to them by DECSB, which had served as the EPCC contractor. It also claimed that the incident was due to a breach of DECSB’s obligations under the EPCC contract.

In its notice of arbitration, Tanjung Langsat Port is seeking RM22.43 million in repair and reconstruction costs as well as RM2.29 million for the repair and reconstruction of the facility payable by the port operator, among others.

It is also claiming RM76.74 million for loss of profit had the facility been approved by Platts, or alternatively RM62.14 million for loss of profit if the facility had remained unapproved by Platts.

This article first appeared in The Edge Financial Daily, on Aprill 11, 2014.